4. After 30 years, Stanford Graduate School of Business claims first place.
Well, it’s about time. For the past 30 years, Businessweek has been ranking MBA programs. Not until this year did Stanford top the list. The school did it by taking first place in three of the four ‘indexes’ of the new ranking, compensation, networking and entrepreneurship, and by also ranking in the top ten on ‘learning.’
It must be said that even though Stanford has consistently reported the highest annual starting compensation in the world and boasts the lowest acceptance rate–a mere 6%–the school tends not to perform all that well on various rankings.
There are several reasons for this, all worth noting now that Stanford has finally climbed into first in this ranking.
1. The school tends to do less well on rankings that survey students or graduates. Despite the fact that MBAs at Stanford get to stroll around in the winter months beneath palm trees in shorts and flip-flops, they tend to be more difficult to satisfy. The former head of Stanford’s MBA program, now dean at Chicago Booth, confirmed this point of view in a recent Poets&Quants interview. “The curriculum there (at Stanford) creates more tension between the students and the administration and the students and what the faculty wants to do,” says Madhav V. Rajan. “There is just less of that here (at Booth). The faculty tend to teach things that they do research on, and the students buy into that in terms of what they want to study so it is a much more aligned place than Stanford.”
2. Stanford also tends to underperform in rankings that deploy recruiter surveys, in part because it’s harder for mainstream MBA employers to recruit and hire Stanford grads. That’s mostly because many want to do their own startups or work for a startup or an early stage company. Or, they want to work in venture capital and private equity which usually means an individual job search. The result is that an already smaller class size becomes smaller still, only to frustrate the mainstream recruiters who fill out these surveys.
3) Rankings that give significant weight to placement rates hurt Stanford because year after year the school lags peers in putting its MBAs in jobs right away. Just 73% of Stanford MBAs had job offers at graduation last year, and acceptances at graduation trailed offers by nine percentage points at 64%. Even three months later, acceptances were only 88% when most peer schools at close or at the 100% number. This is all a function of Stanford MBAs being more choosy about landing the perfect offer, but it is also due to the fact that more Stanford MBAs prefer to spend their summer internships at Silicon Valley startups and early stage firms and then seek full-time offers with more established companies. At most other schools, internships are converted into early full-time job offers that lead to better placement numbers Businessweek‘s new methodology did not put that much weight on placement metrics.
5. What U.S. News & The Economist Gives Businessweek Tries To Take Away
One of the leading business schools that seemed to have significant rankings momentum this year has been the University of Michigan’s Ross School of Business. The school cracked the Top Ten in both U.S. News and The Economist.
Ross rose four places in U.S. News to claim a seventh place rank, up from 11th a year earlier—the first time the program had reached the Top 10 in 14 years. In the process, it leapfrogged rivals like Columbia, Tuck, and Yale SOM, thanks to $148K median pay packages and 97% placement within three months of graduation for the 2017 class.
By the same token, Ross, along with Stanford GSB, were the only full-time MBA programs to be ranked among the best in every specialization surveyed by U.S. News. A testament to the program’s top-to-bottom excellence, Ross finished 3rd in both management and operations (and 4th in marketing and accounting).
The school also climbed five places on The Economist list to finish seventh as well on the magazine’s global MBA ranking, up from 11th last year. That made Ross the sixth best in the U.S., behind only Booth, Kellogg, Harvard, Wharton and Stanford, lofty company, indeed.
But what U.S. News and The Economist gave, Businessweek has tried to take away. Ross tumbled a half dozen places to rank a lowly 18th on the 2018 Businessweek list, behind USC Marshall and the University of Washington’s Foster School of Business.
That’s a real surprise and just yet another reason not to put too much stock in this ranking. Under Dean Scott DeRue, Ross is out front in bringing experiential learning to an entirely new level. In 18th place? We not only don’t think so, we know so.
6. The Eight-Place Rise Of UVA Darden
One of the more pleasant surprises in this year’s ranking is the rise of the University of Virginia’s Darden School of Business. The school climbed eight places to move into the Top Ten at a rank of ninth from 17th a year ago. The improvement brings Darden full circle from the original Businessweek ranking in 1988 when the school was solidly in the Top Ten MBA experiences at a rank of seventh.
Back then, Darden achieved its high ranking because the Businessweek methodology put a significant emphasis on the quality of teaching and the engagement of faculty in students. Surveys over many years have shown that the school has the best MBA teaching faculty in the world.
The uptick is well deserved and comes at a good time in the school’s history. The white supremacist protest in Charlottesville last year severely impacted MBA applications, helping to cause a steep 16.7% drop. Dean Scott Beardsley has been successful in raising tons of money for MBA scholarships with the goal of making Darden’s program among the most affordable premium MBA experiences in the world. It’s worth noting that Darden also gained a spot in The Economist‘s global MBA list this year, rising to ninth place from tenth. If anything, the new improved rankings should help more applicants rediscover this gem of a case study MBA program.